The S&P 500 E-Mini Futures (ES) are experiencing an upward trend in the fifth wave, following a decline to 6540.5, which completed wave (4). This current wave (5) is structured as an impulse Elliott Wave pattern. Wave ((i)) concluded at 6718.5, with a pullback ending at 6593.25. A rally in wave ((iii)) peaked at 6722.5, followed by a dip to 6666. The final rise in wave ((v)) reached 6766.75, forming wave 1 at a higher degree.

The wave 2 correction appeared as a double three Elliott Wave structure. Wave ((w)) descended to 6651.5 after the wave 1 peak, with a rally in wave ((x)) to 6750.5. Finally, wave ((y)) declined to 6571.25, completing wave 2. The Index has moved into wave 3, with wave ((i)) of 3 nearing completion. A corrective wave ((ii)) will follow, retracing from the October 17 low, before the trend continues upward. Support is expected to hold at the 6540.5 level in a 3, 7, or 11 swing.

Global Economic Data

Elsewhere, the UK Office for National Statistics will publish September’s Consumer Price Index at 06:00 GMT. Trends show Bitcoin treasuries inflows have decreased by 99%, with Bitcoin becoming a reserve asset in corporate and government treasuries.

Based on the current Elliott Wave structure, we see the S&P 500 E-mini futures in a strong upward trend that began in April 2025. However, the market is due for a short-term pullback before it continues its climb higher. The critical support level to watch is the pivot at 6540.5, which should hold for the bullish outlook to remain valid.

The immediate catalyst for this expected dip could be this morning’s UK Consumer Price Index data. Markets are already braced for an increase in inflation, a scenario that has historically triggered volatility as we saw throughout 2023 and 2024 when central bank policy was highly sensitive to such prints. A higher-than-expected number could easily initiate the corrective wave that we are anticipating.

This overall bullish sentiment is supported by a global economy that has performed better than feared earlier in the year. For instance, the latest US jobs report for September 2025 showed the creation of 210,000 new jobs, keeping unemployment low at 3.7% and suggesting underlying economic strength. This provides a solid foundation for corporate earnings and justifies buying into market dips.

Derivative Trading Strategy

However, there is an underlying anxiety, as tectonic shifts are still taking place beneath the surface. We can see signs of this risk-aversion in other asset classes, such as the reported 99% plunge in inflows to corporate Bitcoin treasuries. This indicates a significant cooling of institutional appetite for more speculative assets compared to the peak we witnessed last year.

For derivative traders, the coming weeks are about preparing to capitalize on this temporary weakness. The strategy should be to view any pullback towards the 6600 level as a potential buying opportunity for the next major leg up. Selling out-of-the-money put spreads below the key 6540.5 pivot could be an effective way to enter long positions or collect premium while the market finds its footing.

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